Apps Boost Auto & Biz Lending

From shopping for a car to offering small businesses the capability to accept payments on the go, credit unions and CUSOs continue to try and stay a step ahead in the mobile sector to keep up with members who value around-the-clock convenience.

From all indications, smartphone usage won’t slow down any time soon. In 2008, there were 7.4 million mobile banking users, according to the Forrester Research Mobile Banking Forecast, 2012-2017. That figure has soared to 61.1 million this year. By 2017, it is forecast to be 108.3 million.

And, more than two billion mobile phones will be in the hands of users by 2015, which is set to surpass PCs and tablets, according to a 2013 Gartner Research study.

Prompted by a surge in smart phone usage, auto buying service CUSO Autoland Inc. said it launched a mobile website Oct. 1 to meet the research and shopping needs of car buyers. The Chatsworth, Calif.-based CUSO said it has seen a 67% jump in mobile traffic to its website in the last year.

Autoland President Jeffry Martin said unlike a mobile application that requires users to download software to their mobile device, the CUSO’s website is automatically presented through the phone’s Web browser. The site was designed to deliver a pleasing user experience with key features online shoppers are looking for such as a streamlined mobile interface and full chat capability with Autoland representatives, according to the CUSO.

“After studying the behavior of members that had visited our full-site via mobile, we recognized the need to optimize this channel to improve the user experience and increase our web lead conversion rate,” Martin said.

With nearly four out of five new vehicle buyers conducting online research during the shopping process and 23% of those shoppers using a smart phone to access this information, Martin said implementing a mobile strategy has been a priority for Autoland this year.

When Autoland began development of its mobile platform, the CUSO assumed that the audience with the greatest propensity for this channel would be younger car buyers. Data from Autoland showed that boomers represented 42% of the CUSO’s sales while Millennials only represented 10%.

America First Credit Union introduced The Dot, a mobile credit card payment device for its business members.

“Interestingly enough, our research determined that boomers, the generation who account for the majority of Autoland sales, are just as digitally oriented toward mobile when it comes to their research and service expectations,” Martin said. “We feel we’ve developed a mobile solution that satisfies those expectations for car buyers of all ages.”

In June, CUNA Mutual Group in Madison, Wis., officially launched its AskAuto downloadable smartphone and table application after a sneak peek at CUNA’s Government Affairs Conference in February. By scanning the vehicle identification number, the member learns basic vehicle information, including average retail cost of the new or used vehicle and EPA mileage estimates, according to the company.

The application saves this information along with the member’s notes and ranking preferences to allow for a comparison between vehicles before deciding to purchase. Once a decision is reached, the member can also submit a credit union loan application through AskAuto.

So far, 45 credit unions have signed on to use AskAuto and 35 have implemented the app, said Steve Hoke, director of loan growth products at CUNA Mutual and product leader for AskAuto.

“We’ve been really happy with traction in the marketplace,” Hoke said. “Part of our intention with the app was to help credit unions communicate with members. Using the app on the dealer lot can help.”

Through October, members have downloaded more than 1,700 AskAuto apps at the iTunes store and at Google’s Play store, Hoke said. More than 1,400 VINs have been decoded, 5,100 messages have been sent by members to credit unions from dealer lots and resulting in 75 loan applications, he added.

“Part of what we had to tell staff internally is you can’t just measure through loans generated through AskAuto. We’re trying to help reinforce the dealer relationship,” Hoke explained. “The message to members is go into the dealer, ask for ‘Mike’ in the financing department but the loan is coming back to the credit union.”

The $40 million Transtar Federal Credit Union in Houston is using the AskAuto app, including its free marketing kit that includes videos, articles, ads, email messages, according to James Tuggle, president/CEO. The credit union also offered a 1% discount on all loans generated through the AskAuto app or a mobile application.

In a little more than two months, the app had been downloaded 93 times and eight new loans were directly attributed to it, Tuggle said. Plus, the average loan amount was more than double that of others accepted during this period: $26,029 for the AskAuto app loans vs. $10,356 for the credit union’s average auto loan.

While Transtar will continue to use AskAuto, Tuggle said face-to-face interaction is still important. As proof, the biggest boost in AskAuto app downloads occurred in conjunction with in-branch promotions. When the credit union hosted breakfasts at its main branch and at its select employer group, every member who came in that day had to walk past Transtar promoting the app, Tuggle said. The credit union set up a QR code so that members could scan the app right into their phone and the response has been positive, he noted.

Transtar has also set up its credit union branches as dealer locations to receive a custom message, Tuggle said. The app’s GPS pinpoints the member’s location and when they walk into a branch it pushes out the message to remind them to check out auto loans at the credit union.

“Mobile is going to be critical to our success and we’re thrilled that CUNA Mutual Group offers tools that reflect this and supports our adoption, and listens to our feedback,” Tuggle said. “Credit unions must find ways to be relevant in a changing environment and the AskAuto app helps us do just that.”

The $5.9 million America First Credit Union in Riverdale, Utah, is one of many financial institutions that are going mobile. To allow its business members to accept payments anytime and anywhere, America First has introduced The Dot, a mobile credit card payment device that connects with an iPhone, iPad or Android device, and works in conjunction with a mobile phone app to accept credit card payments in an almost infinite amount of places.

Through October, members have downloaded CUNA Mutual Group's AskAuto app more than 1,700 times at the iTunes store and at Google's Play store.

America First’s The Dot can also be used to accept payments for phone and email orders, and e-commerce, the credit union said, adding any off-site merchant can safely process customer payments and immediately email receipts to their customers upon purchase.

“We saw an opportunity to enhance our business member’s ability to accept payments wherever they were doing business,” said John Lund, president/CEO of America First. “A fast, convenient and inexpensive pay as you go solution that can grow as our member’s business grows. It was also a way to compete against the other options in currently in the market.”

America First rolled out the Android application in September and the Apple application in October, Lund said. The credit union has also seen an increase in new business accounts along with existing businesses switching to iTransact, America First’s merchant services provider with existing merchant account users having greater flexibility.

The Dot is powered by iTransact, a local payment acceptance company in Farmington, Utah, Lund noted. In 2004, America First said it joined with iTransact to offer Visa, MasterCard, and Discover card processing for its business members.

Although there was some expense involved in making The Dot available to America First’s business members, the cost was minimal compared to the benefits of them being able to accept payments anywhere, Lund said. The bigger returns are offering a value-added service and the ability to build loyalty, he pointed out.